UNITED DAIRY Farmers, the North’s largest diary co-operative owned by 1,900 farmers grew turnover by a record £69 million to more than £400 million in the 12 months to last March.
Latest accounts show the Belfast headquartered co-op, which also owns the dairy processing business Dale Farm, delivered strong year on year growth in a tough consumer market.
The United group’s 21 per cent increase in turnover was complemented by a 17 per cent increase in pretax profits to £4.16 million to March.
Payments to its members for milk supplies increased by £60 million over the previous year, with milk prices up by more than four pence per litre.
Shareholders’ funds increased by £12.1 million to £39.15 million, largely due to the profits retained.
David Dobbin, the group’s chief executive, said United’s impressive performance had been driven by increased market prices for milk and commodity dairy products. The figures show that milk supplies increased by 8 per cent from 904 million litres to 979 million litres in 2010/11.
He said there had also been solid growth in the volume of milk being sold and processed and the contribution from two recent acquisitions – United Feeds and Fane Valley’s liquid milk business.
He said the group had also benefited from a global recovery in dairy markets which had been boosted by strong demand for power from China and North Africa and for butter from Russia whose internal dairy sector had suffered because of a drought.
Mr Dobbin said that, while its processing division, Dale Farm, had shown an impressive 12.2 per cent growth in turnover to £191.6 million in the 12 months to March this had not been driven by consumer product sales.
Dale Farm produces a range of products from yoghurt to ice-cream, milk and butter, and cheeses. United’s latest accounts show that consumer product sales grew by just 3.9 per cent in its last financial year. This compared to a 36 per cent growth rate in commodities and an 18.5 per cent increase in the sale of food ingredients.
Mr Dobbin said dairy markets have remained firm and although internationally traded commodities have recently showed some signs of weakening, he is confident that the group has made an “encouraging start to 2011/12”.
“Global milk supply has surged in response to better returns and more favourable weather and this is resulting in some weakening in commodity markets, especially power,” he warned.
One aspect highlighted in the last set of accounts from the United Diary Farmers is a big reduction in its net pension deficit from £9.6 million to £780,000.
This is largely because of the UK government’s decision to switch private sector pension indexation from retail price index to consumer price index.
